If you're facing tax trouble such as a review or an audit, you may be wondering where you can turn for assistance. Many taxpayers are familiar with tax professionals such as certified public accountants (CPA) and tax attorneys, but another valuable resource for tax assistance is an IRS enrolled agent (EA). Enrolled agents are highly trained and qualified to provide tax advice and help for just about any possible situation.

Enrolled Agents vs. Accountants

While both enrolled agents and accountants can be helpful in preparing tax returns and offering tax advice, their actual job duties are very different. Accountants are trained to offer general financial advice and help on topics that may include general ledger entries, bank reconciliations, and taxes. Enrolled agents, however, are specially qualified for taxation, which means that they specialize in knowing the tax code and how it applies to various taxpayer situations. As such, enrolled agents are usually helpful for those who have complex tax situations such as individuals who operate corporations, use tax shelters, or have passive income and loss to report. Some accountants are also designated as enrolled agents.

What Does an Enrolled Agent Do?

An enrolled agent is authorized by the IRS to offer specialized tax advice and counsel for taxpayers. They may help provide audit information for tax reviews, and they may legally represent them during any audit appeal hearings. However, enrolled agents are not only valuable for assistance during auditing procedures. They can also offer tax planning advice throughout the year, especially for taxpayers who own real estate, are operating businesses, and considering investment income options.

How Do Individuals Become Enrolled Agents?

The process of becoming an enrolled agent is a lengthy one. Individuals must qualify by either working at the IRS for five years in a position that required them to know and apply the agency's tax code regulations or by taking and passing an intensive examination that covers all aspects of the IRS tax code. Along with the initial process, those who become enrolled agents must maintain their designation by taking continuing education courses that keep them up-to-date on the changing requirements of the tax law.

Enrolled agents offer both tax preparation advice and year-round help for individuals. Using an enrolled agent at tax time can make it easier for a taxpayer to prepare a return or to reduce his or her tax liability. Hiring an enrolled agent to assist with tax planning can help taxpayers prepare for the next year's return by restructuring their expenses and deductions throughout the year.